Kerala's Solar Revolution: GST Cut Makes Rooftop Power More Affordable Than Ever

A shining new era for green energy has dawned in Kerala! The state is poised for a significant surge in rooftop solar installations, all thanks to a crucial policy change: the Goods and Services Tax (GST) on these systems has been slashed from 12 percent to a mere 5 percent. This dramatic reduction applies to both the equipment and the installation services, making sustainable energy a much more accessible dream for homeowners across the state.

This move is a massive shot in the arm for the Kerala State Electricity Board (KSEB)'s ambitious 'Soura' scheme.

KSEB has been striving to install 1000 megawatts (MW) of solar power by 2022, and this affordability boost is expected to accelerate their progress significantly. Before this reduction, the higher cost of solar installations often acted as a deterrent for many potential adopters. Now, with the GST cut, the financial burden is substantially lighter, paving the way for wider adoption.

To put this into perspective, let's consider a typical 3-kilowatt (kW) rooftop solar power system.

What previously would have cost around Rs 2.94 lakh, including the 12 percent GST, will now come in at approximately Rs 2.73 lakh with the new 5 percent GST. This translates to an immediate saving of roughly Rs 21,000 for the consumer, making the investment in solar power more attractive and quicker to recoup.

But the good news doesn't stop there! Consumers are also eligible for the Central Financial Assistance (CFA) provided under the new Phase II of the Pradhan Mantri National Programme for Rooftop Solar (PNPM Phase II).

This financial aid is directly disbursed to the beneficiaries. Households installing up to 3 kW of solar capacity can avail a generous 40 percent subsidy, while those opting for systems between 3 kW and 10 kW will receive a 20 percent subsidy. These combined incentives make the prospect of going solar incredibly compelling.

With reduced installation costs and attractive subsidies, Kerala is empowering its citizens to not only save money on their electricity bills but also to actively contribute to the state's renewable energy goals.

KSEB will continue to oversee the installation process and manage the billing adjustments, ensuring a smooth transition for new solar users. This landmark policy shift is set to propel Kerala towards a greener, more energy-independent future, harnessing the abundant power of the sun for a sustainable tomorrow.